Latham Group, Inc. (NASDAQ: SWIM), a leading manufacturer of residential and commercial swimming pools, has recently released its Q2 2024 earnings report, highlighting both challenges and strategic advancements.(Editable Templates)
Financial Performance
In the second quarter of 2024, Latham reported net sales of $160.1 million, a 9.6% decline from the previous year, attributed to a 15% decrease in new pool starts. Despite this downturn, the company achieved a significant improvement in profitability. Gross margin expanded by 470 basis points to 33.1%, driven by restructuring initiatives, lean manufacturing practices, and cost containment measures. Net income more than doubled to $13.3 million, and adjusted EBITDA increased by 11.2% to $34.5 million, reflecting effective expense management and operational efficiencies.(www.alphaspread.com)
Strategic Developments
Latham’s strategic acquisition of Coverstar Central, a manufacturer of automatic safety pool covers, was completed using internally generated funds, underscoring the company’s strong financial position. This acquisition is expected to add $20 million in net sales and enhance EBITDA margins by approximately 140 basis points annually.(www.alphaspread.com)
Market Outlook
Despite the challenges in the pool construction market, Latham maintains a positive outlook. The company anticipates a seasonal uptick in sales as the peak pool-building season progresses and has adjusted its 2024 revenue guidance to a range of $495 million to $525 million. Latham’s commitment to innovation, operational excellence, and strategic acquisitions positions it well for sustained growth in the competitive pool manufacturing industry.(www.alphaspread.com)
For more detailed information, you can access the full earnings call transcript here: (www.alphaspread.com).(www.alphaspread.com)
